Business Segments

9 Months Ended

Sep. 30, 2020

Business Segments

Business Segments

10.           Business Segments

The Company operates in two business segments, ATG and CPG. The Company’s reportable segments are strategic business units that offer different products and services. The segments are composed of separate corporations and are managed separately. Operations in ATG primarily involve the design, manufacture, and marketing of servo-control components (i.e., torque motors, control valves, actuators, etc.) for government, commercial and industrial applications. CPG’s operations involve the design, manufacture and marketing of a variety of cutlery products for use by consumers and government agencies. The Company derives its primary sales revenue from domestic customers, although a portion of finished products are for foreign end use.

As of September 30, 2020, the Company had identifiable assets of approximately $53,632,000 ($49,470,000 – December 31, 2019) of which approximately $43,531,000 ($39,980,000 – December 31, 2019) was for ATG and approximately $10,101,000 ($9,490,000 – December 31, 2019) was for CPG.

Information regarding the Company’s operations in these segments is summarized as follows:

	($000’s omitted except per share data)
	ATG						CPG						Consolidated
	Nine Months Ended						Nine Months Ended						Nine Months Ended
	September 30,						September 30,						September 30,
	2020			2019			2020			2019			2020			2019
Revenues from unaffiliated customers	$	33,228		$	33,926		$	6,021		$	4,506		$	39,249		$	38,432
Cost of goods sold, inclusive of depreciation		(26,495)			(24,400)			(5,187)			(5,155)			(31,682)			(29,555)
Gross margin		6,733			9,526			834			(649)			7,567			8,877
Gross margin %		20.3	%		28.1	%		13.9	%		(14.4)	%		19.3	%		23.1	%
Selling, general and administrative		(4,857)			(4,558)			(1,255)			(1,878)			(6,112)			(6,436)
Interest		(125)			(66)			(9)			(22)			(134)			(88)
Total costs and expenses		(31,477)			(29,024)			(6,451)			(7,055)			(37,928)			(36,079)
Income before income tax provision		1,751			4,902			(430)			(2,549)			1,321			2,353
Income tax provision (benefit)		318			852			(78)			(443)			240			409
Net income (loss)	$	1,433		$	4,050		$	(352)		$	(2,106)		$	1,081		$	1,944
Capital expenditures	$	640		$	1,449		$	68		$	211		$	708		$	1,660

	($000’s omitted except per share data)
	ATG						CPG						Consolidated
	Three Months Ended						Three Months Ended						Three Months Ended
	September 30,						September 30,						September 30,
	2020			2019			2020			2019			2020			2019
Revenues from unaffiliated customers	$	8,184		$	11,180		$	2,113		$	1,182		$	10,297		$	12,362
Cost of goods sold, inclusive of depreciation		(8,636)			(7,378)			(1,826)			(1,449)			(10,462)			(8,827)
Gross margin		(452)			3,802			287			(267)			(165)			3,535
Gross margin %		(5.5)	%		34.0	%		13.6	%		(22.6)	%		(1.6)	%		28.6	%
Selling, general and administrative		(1,712)			(1,539)			(384)			(595)			(2,096)			(2,134)
Interest		(40)			(25)			(2)			(6)			(42)			(31)
Total costs and expenses		(10,388)			(8,942)			(2,212)			(2,050)			(12,600)			(10,992)
Income before income tax provision		(2,204)			2,238			(99)			(868)			(2,303)			1,370
Income tax provision (benefit)		(512)			389			(9)			(151)			(521)			238
Net income (loss)	$	(1,692)		$	1,849		$	(90)		$	(717)		$	(1,782)		$	1,132
Capital expenditures	$	99		$	288		$	16		$	19		$	115		$	307